Explain Purpose And Reason For Establishment Business Essay


Goldenstate Manufacturers is a large textile company in the business for over 3 years. Moreover, it is among the top 5 manufacturing organizations in Australia. There are purposes and reasons for the establishment of Goldenstate Manufacturers as follows:


Interest of shareholders - the shareholders are the owners of the company. The owners' interest is profit maximization. It is simply to "make money" or to increase profit. Profit is necessary for ongoing business operation. It allows a business to sustain itself.

Interest of stockholders - to cater the needs of the public such as:

Employment - the hires employees who have the right skill, and also to consider the personality, and attitude fit for the company.

Good Quality Product - good quality product meets the needs and expectations of customers, and is appropriate to the price. Aspects of good quality are as follows:

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Good design - looks and style

Durable - lasts long as it should

Value of money - customers must be satisfied that the price fairly reflects the quality

b. Identify three (3) other types of organisations and explain how their purpose and reason for establishment might differ from Goldenstate Manufacturers.


Salvation army is a charity organization. It differs from Goldenstate manufacturers, because it is not after profit. It caters to the needs and assist on the problems of the society, such as hunger, homelessness, social isolation, addiction, loneliness, unemployment, when people are facing hardship. They tackle social problems and help improve people's lives. It has extensive social service network which includes food bank, budgeting, drug and alcohol treatment, problem counselling, etc. This organization ties up with other business to have funds in reaching out to people who are in need.


UNICEF is the United Nations Children's Fund. It is the world's leading aid agency, having saved the lives of more children than any other organisation. Their vision is to build a world where the rights of every child are realized. This organization differs from Goldenstate because it focuses on the needs of children, and this is a social activity. Compared to Microware, they do not sell goods, they are not after personal profit, but they raise their funds through donations and partnership.

NZQA (New Zealand Qualifications Authority)

NZQA's role is in the education sector. They makes sure that New Zealand qualifications are observed as satisfactory and vital, nationally and internationally, in order to assist students achieve their chosen careers and to be a part of the New Zealand society. It is different from Goldenstate because it is not a business organization. Their service is to manage New Zealand Qualifications framework, administering assessment system, setting standards, and independent quality assurance of non-university education providers. It is focused on quality education and not for profit.

1.2 Identify at least two (2) of the main roles/functions that need to be carried out by the following:

a. Mark (CEO) - He is the highest ranking executive in the company and is in charge of the main responsibilities:

Provide overall leadership - by establishing direction and delegation, being the primary representative of the company. He is responsible in setting important objectives and goals, and make guidelines on how to conduct the business of Goldenstate.

Decision Maker - as a CEO, Mark is responsible of making long term plans for the company. He should apply and understand that strategic management is a part of his responsibililty. He is in charge for final decisions, but considering advises from his subordinates or the General Managers of each department of the Goldenstate.

b. Carl (Operations Manager)

Developing Strategies - Carl should develop operation strategies by setting guidelines. He should be flexible in revising them whenever there are problems changes in the company such as decrease in sales.

Overseer - in order for the company to have effective production of goods and services, Carl should have the responsibility for all the activities in the organisation to promote coordination. He should have communication skills that would promote motivation of the staff. He should also promote free flow of communication between the staffs.

c. Quality Control Manager

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Ensure the quality of a company's products and services - to ensure that the products are of the highest quality while striving to maintain profitability.

Reporting - report back to workers to let them know what they need to do to improve product quality due to not meeting the necessary standards.

d. Research and Development Manager

Market Research - to research about the products and services that would increase the profit of the company, and meet the preferences, needs and expectations of the customers.

Develop product - Through research, products are improved and developed by revising the design. This is important due to continuous technology, challenge in competitors, and changing preference of customers.


a. Explain how effective you feel Goldenstate Manufacturers is in meeting its purpose.

In order for Goldenstate to be effective, it should maintain the number of production and provide quality products to meet the demand or needs of the clients. There should also be coordination of the processes. The staff should also have good communication with each other to maintain the flow of production. However, over the past 18 months, problems have arised which made Goldenstate Manufacturers ineffective in meeting its purpose. The problems are as follows:

Dropped Production - 'Company's production has dropped by 20%. This is due to the stitching department held up because of waiting for fabric or out of accessories. This have caused production pressure to the production section and staffs do not stay with the company for long.

Customer complaints increased - Due to production pressure, the goods are not checked before shipping if there are any faulty items. The team leaders always have their excuses to explain the causes of delays and poor quality. As a result, customer complaints have increased.

b. List four (4) main management skills or competencies needed for it to be competitive.

1. Technical Skills

2. Human Relations Skills

3. Conceptual Skills

4. Time Management Skills

c. Explain why you feel each of the four skills or competencies listed in 1.3(b) are important.

1. Technical Skills - The ability to have specialized knowledge or expertise. This skill is practical. It helps a person to be knowledgeable on the use of tools and machines of the company. This skill can be attained from training and through experience in the field. This skill is important especially to those who are incharge of the actual operations of the business. Without this skill, production will be affected.

2. Human Relations Skills - It is the ability of developing and maintaining good relations with people, encouraging, motivating and able to handle disputes. This is important to maintain good relationship between the staffs since conflicts or communication interference causes disagreement between people, which can result to reduced productivity.

3. Conceptual Skills - It is the ability to formulate ideas and thinking creatively. To have this skill, a person should have broad range skills in analyzing complex situations, completing the picture and formulate solutions on solving problems as these would impact the decisions on all departments of the organisation. A person with this skill can also come up with an idea of a new processes or new products for the benefit of the company. Mark, the CEO, should have this skill, by understanding Goldenstate as a whole and would eventually develop creative strategies.

4. Time Management Skills - It refers to the development of tools and processes that

increase productivity and efficiency. Productivity is increased due to the ability of completing more tasks.

This skill includes the following:

Goal Setting






Time Management has a lot of advantages. It has emotional, physical, and financial benefits. When schedules are prioritized and organized, and tasks are completed on time, workload and stress is reduced.

Question 2


From any of the leadership theories you have studied on the course, identify and briefly explain which theory Ron, the Finishing Manager most closely aligns with, giving evidence from the case study to support your comments.

According to the case study, 'Adam, the Finishing Manager believes in the philosophy of "My way or no way". Ron, the finishing manager follows the same approach and believes in not allowing his staff to take the liberty of doing things without his knowledge'.

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From the leadership theories I have studied, the theory which Ron most closely aligns with is the Behavioral Theory.

Behavioral theory do not seek inborn traits or capabilities but rather, it is learned, and they look at what leaders actually do. Ron is aligned to this theory because he learns and follows the behaviour of Adam being autocratic. He acts the same way and adopt to it.

Identify and explain the Leadership styles of Adam, the Knitting Manager, and James, the Dyeing Manager giving evidence from the case study to support your comments.

Adam - Autocratic

According to the case study, 'Adam, the Finishing Manager believes in the philosophy of "My way or no way".

This means that he imposes his own decisions, and does not consult his subordinates. He wants to be in control over them and their suggestions are not permitted no matter how it may benefit the group.

This leadership style can cause demotivation and poor relationship between Adam and his subordinates. However, there are also advantages such as quick decision making and efficiency will be high.

James - Laissez Fare

James' leadership style is the opposite of Adam's leadership style. According to the case study, 'James, the Dyeing Manager, does not take much notice if workers don't do their jobs. James likes to be liked by his staff and refrains from taking any actions which might upset the team and/or turn them against him'.

This style follows the saying 'let it be', and it is evident that James adopts to it. He has lack of direction and gives full freedom to the group members to work their own ideas.

This leadership style can cause inefficiency and poor decision making. The members will be confused of what to do and causes lack of control. Coordination will then be a problem. However, the advantages are: the members can be highly motivated, and come up with creative ideas for the benefit of the company.

Comment on how appropriate you feel each of these leadership styles are in the current situation - give two (2) reasons for your answer to each style.


This leadership style is inappropriate for the Managers, Adam and Ron of the Knitting and Finishing Department to follow due to some reasons.

Very high work pressure on staffs - The staffs do not have the liberty to do their own way of doing their job, on doing what is comfortable to them, and they do not have the right to disregard what Adam and Ron wants them to comply. This lead to staff being unhappy, and unmotivated.

Decreased Production - This is a problem because these managers do not consult from the subordinates who knows better on the issues and problems that are arising. They should ask for suggestions, find out the reason of turn-overs and pressure, and make solutions so that problems are lessed and production will be improved.

Laissez Faire

This leadership style is inappropriate to the current situation of the company because of:

Staff Quantity/Division Problems

Knitting and Finishing Department has high turn-over - The managers of these departments are inappropriate to use this leadership style because there is high turn-over. There are new staffs every now and then, and they need guidance on how to do the job correctly. If they will be trained and supervised, the work pressure will be lessened, the staff will be confident in doing the job, they will be contented and happy, and eventually, turn-over is minimized.

Dyeing and Cutting Department is overstaffed - The managers of these departments should make sure that the number of staff is adequate by reporting it to Carl, or they should delegate more workload to the staff to increase the production. James, the Dyeing Manager, should supervise his department, delegate more, and make sure that everyone is doing their job, especially because it is overstaffed, and there is a tendency that the staffs will be lax. If these managers continue to follow this leadership style, they would eventually lose their control over the staff, and it would be very hard for them to impose new rules. Moreover, there will also be a tendency that the staff will be bored if they are used to the same work routine. Therefore, delegation is really essential for them to be motivated, and new tasks will be challenging for them.

Finishing, Cutting, Stitching, and Purchasing sections are disorganized

These sections are disorganized, and the managers cannot improve it. Carl, the Operations Manager, should then organize a meeting, and do some brainstorming so that he is aware of the problems that are arising on each department. He will be responsible in giving advice to these managers on how to solve these problems.


a. Select one (1) motivational theory:

Briefly describe the theory

Maslows Hierarchy of Needs

ABRAHAM MASLOW developed the model. It is used until today in understanding human motivation, personal development and management training. This is more relevant than ever since it helps the employers to be responsible in providing a workplace environment that motivates and encourages the employees to meet their own unique capabilities (self-actualization).

Every person is motivated by need. This theory helps to detail how these needs motivate us. We must satisfy each need, starting from the first (Physiologic) for survival. When these physical and emotional needs are met, the higher order needs will follow. Lower order needs that are not satisfied will not make a person to be concerned of higher order needs.

The needs are as follows according to order (lower to higher):

Physiologic Needs - food, drink, shelter, air, warmth, etc.

Safety Needs - security,law,order,limits,stability, etc.

Love and Belongingness - friends, family, relationships, affection, etc.

Sel-Esteem Needs - achievement, independence, mastery, confidence, etc.

Self-Actualization Needs - creativity, self-fulfillment, spontaneity, personal growth

Using information from the case study, explain to Mark how he might use the theory to motivate Carl the General Manager Operations.

Mark, the newly appointed CEO should achieve the goal in 'optimizing production, and improving the quality of finished garments in 6 months time', However, the Operations Department is facing different problems, and is affecting the Company in meeting its purpose. Carl, the General Manager, should be advised and motivated by Mark because even though he is 'firm and strict, he finds it hard to communicating at all levels. He thinks that it is hard to recruit technical managers, which is the reason why he does not interfere on how the section managers manage their staff and organise workload.'

Therefore, Mark should motivate Carl because motivation has a lot of advantages. It puts the staff into action, improves efficiency of employees, it leads to achievement of organisational goals, builds friendly relationship, and stability of workforce. In order to achieve this, Mark can use one of the Motivational Theories. One of it is the Maslow's Hierarchy of Needs.

Mark should assess Carl. Does he achieve all the levels? After assessing, Mark should therefore focus on what Carl has not achieved.

Physiologic -Without food, shelter, clothing, etc. Carl cannot do his job properly and production of the company will be affected.

Safety - Every member of the company must be safe in order to be motivated to work. Reassurance is also needed to motivate Carl, such as protection against unemployment, etc.

Social - Carl's communication skills should be enhanced. He should then be advised to keep in touch more often to his subordinates and encourage him to build teamwork so he can improve his social skills.

Esteem - Carl have a self-esteem problem because he is not confident in communicating at all levels. In order to boost Carl's self-esteem, Mark should encourage him. He should give some advice on how he will communicate to his subordinates. Carl needs to understand that he is in the authority to check what is happening under him.

Carl's should be given recognition if he has done his job well, or he is coping up. Every employee has the right to be treated with respect. Carl's esteem will also be boosted if he deserves to be promoted.

Actualization - He should be made aware what he thinks about himself, the extent of his success and the challenge of his work.

b. Advise Adam, the Knitting Manager, of four (4) ways he might motivate his staff so they will remain with the company. Make sure you explain:

What he must do and

How he might do it

Motivations is important because it costs much to replace staff than for them to stay in the company. Staff needs to be happy and contented, and to feel respected needed in the company to keep them stay with the company much longer. Some of the ways to motivate the staff are as follows:


There are reasons why there is high turnover, and staff members do not stay in the company for long. Brainstorming is therefore needed for Adam to be aware of the issues that are affecting the staff to leave the company. He should be a good listener to know all their concerns.

Brainstorming motivates the members. It would make them feel valued if their concerns and suggestions are heard. Adam may do it by setting a schedule, so he can discuss with them. Brainstorming will also help Adam identify the strengths and weaknesses of the members. This would help him delegate tasks according to their ability and they will be highly motivated.

Lead by example

A good leader should also be a good example. Adam's expectations from the members should also be seen from him so that they will trust him and cooperate with him. He should 'walk the talk' or simply, his actions are match with his words. Examples are punctuality, hard work, patience, respect, etc.

Personality development and trainings

There is high turnover in the company. Trainings are therefore needed to guide new employees. Trainings are important to enhance and develop the skills of the staff. It would make them confident and knowledgeable on how to do the tasks properly. Adam should make a research on the trainings that are applicable to them, that are in line with the job they are doing, so they can relate it or put it into practice. He should set aside time for it to be accomplished by making a schedule on when will it be conducted. After the trainings, Adam should assess them and get feedback on how it benefitted them.

Set Goals and Give Rewards

Setting goals will motivate the staff in achieving it on time. In setting goals, Adam should make sure that the goal is SMART (Specific, Measurable, Attainable, Realistic,Time-bound) before these goals are being implemented to the staff.

Giving rewards is also a good motivator. Adam can give rewards to the staff who are doing well, accomplishing desired tasks, hardworking individuals, etc by giving tangible rewards such as money, gifts, etc. But rewards are not only material things, but also, verbal praise can be more rewarding to the staff.

2.3 Mark the CEO has told Ron, the Finishing Manager that he should delegate more. You are assigned to coach Ron through the steps he must take to delegate effectively.

a. Explain to Ron three (3) benefits of delegation, using information from the case study to illustrate your comments.

Delegation is beneficial not only to Ron who delegates the tasks, but also to the staff and the company. Some of the benefits of Delegation are as follows:

Motivation of the Staff

Ron should delegate more to his staff so they are motivated, and turnover will be lessened. Delegation motivates the staff because they will be challenged on performing new tasks, whereas, they will learn new skills and gain more knowledge. The staff will feel valued in the organization. They will not be bored in doing the same routine of work because they will be challenged on tasks they have never worked before. The staff will be motivated to be more creative and productive in the long run. This will also result to efficiency of the staff.

Saves Time

Time is precious and it should be spent wisely. Delegation can save time if Ron can assign lower priority tasks that are easier to accomplish than higher priority tasks. This would help him to focus on more difficult and important tasks.

Staff Efficiency and flexibility

One example that he can delegate to the staff is training new employees. Employees who have stayed long in the company is more knowledgeable on performing the duties. This is a challenging task for the staff because it would enhance their skills and knowledge, and promote efficiency, flexibility and good decision making. Quality of work will also improve if staff are motivated. They may do a better job because they have the feeling of responsibility for the result even if accountability rests on the delegator.

b. Explain to Ron the five (5) steps needed to be taken for effective delegation.

Make it clear what he should do to each step.

Give practical examples of each step relating to Ron's job and the case study.


Accountability means having the authority and responsibility to fully accept and act the natural and logicalfe

Accountability is also a kind of responsibility, but in the sense of a liability to maintain records of accounts and explain the accounts to the entity or individuals who have assigned this role to them

When authority is delegated to a subordinate, the person is accountable to the superior for performance in relation to assigned duties. If the subordinate does a poor job, the superior cannot evade the responsibility by stating that poor performance is the fault of the subordinate. A superior is normally responsible for all actions of groups under his supervision even if there are several layers down in the hierarchy. Simply stated, accountability means that the subordinate should explain the factors responsible for non-performance or lack of performance.

Accountability means having the responsibility and authority to aact and fully accept the natural and logical consequences for the results of those actions.

In a team-based organization, accountability is focused at the team rather than the individual level. This means that the members of the team feel mutually accountable to each other and that the team as a whole, not any one or two individuals within it, accepts accountability for the results of the team's actions.

Accountability is one of three critical components to effective empowerment. Think of empowerment as supported by a tripod. The three legs of the tripod are responsibility, authority, and accountability. Every new task that is handed off to a team needs to be transferred with this balance in mind.

The balance is achieved when a team has 1. a clear understanding of its responsibilities, 2. the authority necessary to fulfill these responsibilities, and 3. the accountability for the consequences of their outcomes.

Why is Accountability So Important?

Accountability is an odd thing. Many workers do their best to avoid it because it has often been used as ammunition for blame or punishment. The truth is that accountability is unavoidable. In the workplace everyone is accountable to someone. In a traditional organization workers are individually accountable to their respective bosses. In a high performance organization team members are individually accountable to each other and mutually accountable to their customers. But rather than a negative force, research indicates that holding people accountable for their results has very positive effects: greater accuracy of work, better response to role obligations, more vigilant problem solving, better decision making, more cooperation with co-workers, and higher team satisfaction. 


Responsibility indicates the duty assigned to a position. The person holding the position has to perform the duty assigned. It is his responsibility. The termresponsibility is often referred to as an obligation to perform a particular task assigned to a subordinate. In an organisation, responsibility is the duty as per the guidelines issued.

Responsibility is more directly the role that one performs individually. It can be said to be the duty of the person.  

All members of an organization have a unique area of responsibility in which they carry out the activities by themselves without supervision. Within this area of responsibility they take their own decisions. No two persons have overlapping responsibility for the same activity. They may have similar responsibility in different territories, or time frames. But they will not have the responsibility for the very same activity. If some one has delegated part of the activities, which they inherited from higher in the hierarchy, to their subordinates down the hierarchy, then they would continue to have the accountability for these delegated activities, but the responsibility to perform these actions will pass to the people to whom these activities have been delegated. 


Authority is the right or power assigned to an executive or a manager in order to achieve certain organizational objectives.

A manager will not be able to function efficiently without proper authority. Authority is the genesis of organizational framework. It is an essential accompaniment of the job of management. Without authority, a manager ceases to be a manager, because he cannot get his policies carried out through others. Authority is one of the founding stones of formal and informal organisations. An Organisation cannot survive without authority. It indicates the right and power of making decisions, giving orders and instructions to subordinates. Authority is delegated from above but must be accepted from below i.e. by the subordinates. In other words, authority flows downwards.

Authority is the right or power assigned to an executive or a manager in order to achieve certain organizational objectives.

A manager will not be able to function efficiently without proper authority. Authority is the genesis of organizational framework. It is an essential accompaniment of the job of management. Without authority, a manager ceases to be a manager, because he cannot get his policies carried out through others. Authority is one of the founding stones of formal and informal organisations. An Organisation cannot survive without authority. It indicates the right and power of making decisions, giving orders and instructions to subordinates. Authority is delegated from above but must be accepted from below i.e. by the subordinates. In other words, authority flows downwards.


Recognition is the cornerstone of People Empowerment. Recognize, congratulate, promote people's efforts, and reward people for a job well done. Highlight specific accomplishments so that everyone throughout the company can see the business results. This process must be in place before you set up your action teams. Without recognition, people lose their motivation, enthusiasm, or commitment to solve problems and make improvements.

Very simply, People Empowerment is the delegation of authority, accountability, and responsibility to employees for improving the business processes under their control without obtaining permission from management. Without internalizing this definition, empowerment is bound to fail.

Sometimes management really doesn't understand what it is getting into when starting the program. Then, they can't operate without a "command & control" structure. People are hindered or prevented from doing anything without getting permission or asking a higher authority.

Expectations are so broad that people assume they have a "blank check" and can address and attack any issue and problem and run around like "loose cannons" trying to solve every business problem. Often, specific business improvement goals are lacking.

Teams get bogged down in a "paralysis by analysis" mode without taking any actions or getting results. The problem is usually a lack of direction and leadership. Management sees no results and they equate this to a waste of time, and People Empowerment is deemed a failure.

People and teams lack problem solving and interpersonal skills. They don't practice teamwork, can't get to the root causes of problems, and can't achieve consensus. The net result is they don't work together and don't solve problems.

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